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The amount of money banks must have on hand to back up customers’ deposits is __________________.?

a.enough to cover all savings deposits
b.the reserve requirement
c.the same as the amount they loan out.
d.determined by each bank individually.

B. Reserve Requirement, and it’s given as a %. So if the new Reserve Requirement is 15%, then every bank needs to make sure that they have 15% of all deposits on hand in case customers come to retrieve their money.

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6 Responses to “The amount of money banks must have on hand to back up customers’ deposits is __________________.?”

  1. Don’t know?
    References :

  2. not I said the ape on January 8th, 2012 at 2:54 am

    id guess B
    References :

  3. The answer is B.It is a fraction of demand deposits.
    References :

  4. b
    References :
    mises.org
    econtalk.org
    fee.org
    http://www.learnliberty.org/home
    http://workforall.net/index.html
    http://www.freeeconomicsbooks.com/

  5. a.enough to cover all savings deposits

    yes, they can cover all any point of time . But…..
    Money worth 12 times the deposit money is given out as loans with assets mortgaged which they have to auction !
    References :

  6. B. Reserve Requirement, and it’s given as a %. So if the new Reserve Requirement is 15%, then every bank needs to make sure that they have 15% of all deposits on hand in case customers come to retrieve their money.
    References :

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